Newspaper article The Christian Science Monitor

Economist Deciphers International Trends

Newspaper article The Christian Science Monitor

Economist Deciphers International Trends

Article excerpt

THE high-powered group of several thousand people who hold the reins of world finance listen to J. Paul Horne. They want to hear the views of this Paris-based economist on the status of European economies in particular, but also on the outlook for the United States and Japan.

Right now Mr. Horne is saying:

* Britain, Sweden, and Finland are in recession. Britain probably will come out of it in the first quarter of 1993.

* The German economy is stagnating or in a minor recession. National output likely will decline in the first half of next year.

* Growth in France will run about 2 percent this year, and may slow to only 1.5 to 1.7 percent in 1993.

* Output in the Spanish and Italian economies is stagnant or down in this last half of 1992.

* Japan's economy will fall around 0.3 percent in the fiscal year ending March 31, 1993, another 0.1 percent in the following fiscal year. That will be Japan's first real recession since 1974.

* The US economy is picking up now and may act as a world economic locomotive, pulling along other economies.

Since 1975, Horne has been following the European economy for Smith Barney, Harris Upham & Co., a New York-based brokerage house. Previously, he had been a financial reporter, acquiring the knack of writing clearly - an ability appreciated by the several thousand institutional investors receiving his economic reports. In return for his analysis and other investment advice, Smith Barney expects to receive orders for securities transactions, reaping commissions.

In effect, Horne is a kind of salesman for his firm - as are a number of other economists employed by investment banking firms. But Horne, as an international economist, is a relatively rare species. In the last few months, he has talked to members of the London Metal Exchange, some 60 corporate chief financial officers in Milan, the Council of European Economists in Frankfurt, visited top financial people in the Middle East for nine days, twice flown to the US for talks with dozens of institutional investors, including a seminar for some 90 international fund managers.

That gives Horne some influence on the flows of money around the world. …

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